According Muroch, the technology is an approach to validator security that spreads out key management and signing responsibilities across multiple parties, reducing single points of failure and increasing validator resiliency.<\/p>\n
The technology splits a private key used to secure a validator across a cluster of computers. This increases security and allows for some nodes of a validator cluster to go offline, which also reduces single points of failure from the network and makes validator sets more robust.<\/p>\n
\u201cBy splitting keyshares between a diverse set of nodes in a cluster, validators become much more decentralized. Staking pools that use DVT can decentralize their own infrastructure or delegate it to SSV.network node operators.\u201d<\/p><\/blockquote>\n
Data from blockchain analytics firm Nansen shows that Lido Finance accounts for 32% of ETH locked in the Beacon Chain deposit contract. ETH staking pools offered by Coinbase (8%) and Binance (4%) also command a significant share of staked ETH. <\/p>\n
<\/p>\n
As SVV noted in an announcement marking the mainnet launch, centralized exchanges including Coinbase, Binance and Kraken hold around 18% of the total staked ETH, while liquid taking pools like Lido, RocketPool, Stader and Stakewise account for over 36% of the total market share.<\/p>\n
Liquid staking pools became hugely popular in the build-up to Ethereum\u2019s anticipated Shanghai upgrade in July 2023. The event introduced the ability for Ethereum users to withdraw staked ETH from the Beacon contract for the first time. <\/p>\n
SSV intends to offer an alternative liquid and centralized staking pools, which it describes as \u201cfundamentally centralized and custodial\u201d. Muroch added that SSV can significantly increase increase validator private key security and maximize rewards through high performance and a fault tolerant setup that stops slashing penalties for offline validators.<\/p>\n
SSV.network grabbed headlines in\u00a0Jan. 2023\u00a0as it launched a $50 million ecosystem fund to support other projects developing using DVT.\u00a0 The technology was previously highlighted as an important aspect of Ethereum’s scaling roadmap laid out by co-founder Vitalik Buterin in Dec. 2021.<\/p>\n
Magazine:\u00a0Are DAOs overhyped and unworkable? Lessons from the front lines<\/p>\n